Automated Routing: The Path to Optimization

Q: What guidance can you offer firms exploring routing and scheduling technologies for the first time?

A: Automation is a great benefit of logistics technology—though not the only one. Technologies that automate time-consuming, repetitive jobs free us up to do what humans excel at: spotting and dealing with change and exceptions.

It can take numerous individuals and manhours to manually plan, calculate, and adjust route plans for mileage, capacity, driver hours, and total stops. With routing and scheduling software, efficient route plans take mere minutes, incorporating work hours, equipment restrictions, truck capacities, service windows, and more in their calculations. Plans can be re-run quickly to accommodate last-minute orders and schedule changes, and the optimized results improve on manual methods by maximizing loads, and minimizing miles and total transportation costs.

Significant differences exist between technology providers, but don't let the decision process stall because you have too many choices. All the leading routing and scheduling systems will save you time and money.

Based on our experiences with Appian software, automated route plans average 10 to 25 percent fewer trucks, drivers, and hours than manually developed plans, saving eight to 15 percent in total costs.

It's critical to embrace routing and optimization technology as a continual improvement process—not a destination. Your greatest performance improvements may come through new insights from technology, as the knowledge these tools provide prompt you to try a new routing and scheduling approach.

The best logistics technology doesn't simply speed business processes. It provides tools to transform your operations.

Q: What is an example of a transforming logistics technology?

A: Network modeling tools help analyze and improve processes, prepare operations for the future, and target new business.

When the only economic constant is change, an effective tool helps visualize and quantify the impacts of new developments, and compare the outcomes of different responses. Then businesses can manage change instead of just reacting to it.

Transportation network modelers allow you to:

Balance demand with shipper requirements and carrier capacities.

Evaluate mode shifts and cost savings.

Compare business options.

Model new market or consolidation scenarios.

Examine outsourcing opportunities.

Compare trade-offs among contingency plans.

Modeling isn't necessary for operations, but it's an invaluable tool for strategic decision-making and risk mitigation. The more flexible and user-friendly the tool, the better it will serve your business over time.